<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934.
For the quarterly period ended January 23, 2000.
[_] Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934. For the transition period from _________ to __________.
Commission File Number 0-18369
-------
BOSTON RESTAURANT ASSOCIATES, INC.
----------------------------------
(Name of Small Business Issuer as Specified in its Charter)
Delaware 61-1162263
-------- ----------
(State or Other I.R.S. Employer
Jurisdiction of Identification
Incorporation or No.)
Organization)
999 Broadway
Saugus, Massachusetts 01906
---------------------------
(Address of Principal
Executive Offices)
(781) 231-7575
(Issuer's Telephone Number,
Including area code)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X - No __
As of March 1, 2000, there were 7,035,170 shares of the issuer's Common Stock,
par value $.01 per share, outstanding.
<PAGE>
BOSTON RESTAURANT ASSOCIATES, INC.
INDEX
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION Page
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of January 23, 2000 and
April 25, 1999................................................................... 3
Condensed Consolidated Statements of Operations for the thirteen
weeks and thirty-nine weeks ended January 23, 2000 and
January 24, 1999................................................................. 4
Condensed Consolidated Statements of Cash Flows for the thirty-nine
weeks ended January 23, 2000 and January 24, 1999................................ 5
Notes to Condensed Consolidated Financial Statements ............................ 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................................ 8
PART II - OTHER INFORMATION................................................................ 15
SIGNATURES....................................................................... 16
</TABLE>
2
<PAGE>
BOSTON RESTAURANT ASSOCIATES, INC. AND SUBSIDIARIES
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
JANUARY 23 APRIL 25
2000 1999
------------ -------------
<S> <C> <C>
ASSETS
Current:
Cash and cash equivalents $ 1,213,114 $ 1,863,299
Accounts receivable $ 61,731 $ 32,121
Inventories $ 274,714 $ 214,657
Prepaid expenses and other $ 32,935 $ 51,085
------------ -------------
Total current assets $ 1,582,494 $ 2,161,162
------------ -------------
Property and equipment:
Building $ 512,500 $ 512,500
Leasehold improvements $ 4,687,109 $ 3,220,587
Equipment, furniture and fixtures $ 3,092,666 $ 2,290,488
------------ -------------
$ 8,292,275 $ 6,023,575
Less accumulated depreciation and amortization $ 2,994,482 $ 2,567,084
------------ -------------
Net property and equipment $ 5,297,793 $ 3,456,491
------------ -------------
Other assets $ 1,219,733 $ 1,270,041
------------ -------------
Total assets $ 8,100,020 $ 6,887,694
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 383,957 $ 236,770
Accrued expenses $ 715,002 $ 651,089
Current maturities:
Notes payable-stockholder $ 4,929 $ 4,740
Long-term debt $ 322,056 $ 122,076
Obligations under capital leases $ 187,997 $ 102,200
------------ -------------
Total current liabilities $ 1,613,941 $ 1,116,875
Long-term obligations:
Notes payable-stockholder, less current maturities $ 112,850 $ 116,569
Long-term debt, less current maturities $ 822,747 $ 362,925
Obligations under capital leases, less current maturities $ 465,992 $ 331,403
Subordinated debentures $ 1,500,000 $ 1,500,000
Deferred rent $ 129,054 $ 106,513
------------ -------------
Total liabilities $ 4,644,584 $ 3,534,285
------------ -------------
Minority interest in consolidated subsidiary $ 3,678 $ 29,009
------------ -------------
Commitments and contingencies
Stockholders' equity :
Preferred stock, $.01 par value, 10,000,000
shares authorized; none issued $ 0 $ 0
Common stock, $.01 par value, 25,000,000
shares authorized, 7,060,170 shares issued $ 70,602 $ 70,602
Additional paid in capital $ 10,938,877 $ 10,922,636
Accumulated deficit ($7,533,028) ($7,668,838)
------------ -------------
Total paid-in capital and retained earnings $ 3,476,451 $ 3,324,400
Less:
Treasury stock, 25,000 shares and 0 shares
of common stock at cost ($24,693) $ 0
------------ -------------
Total stockholders' equity $ 3,451,758 $ 3,324,400
Total liabilities and stockholders' equity $ 8,100,020 $ 6,887,694
============ =============
</TABLE>
See accompanying notes.
-3-
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended Thirty-nine Weeks Ended
January 23 January 24 January 23 January 24
2000 1999 2000 1999
--------------- --------------- ---------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Restaurant sales $ 4,232,952 $ 3,175,151 $ 10,959,599 $ 9,237,834
Franchise Fees $ 20,000 $ 0 $ 20,000 $ 0
Royalties $ 12,123 $ 0 $ 15,647 $ 0
--------------- --------------- ---------------- ---------------
Total revenues $ 4,265,075 $ 3,175,151 $ 10,995,246 $ 9,237,834
--------------- --------------- ---------------- ---------------
Costs and expenses:
Cost of food, beverages and liquor $ 841,773 $ 677,865 $ 2,222,199 $ 1,934,217
Payroll $ 1,176,709 $ 875,059 $ 3,075,461 $ 2,607,586
Other operating expenses $ 1,189,738 $ 897,446 $ 3,143,770 $ 2,649,253
General and administrative $ 421,993 $ 444,827 $ 1,247,667 $ 1,186,183
Depreciation and amortization $ 205,218 $ 137,873 $ 527,411 $ 415,622
--------------- --------------- ---------------- ---------------
Total costs and expenses $ 3,835,431 $ 3,033,070 $ 10,216,508 $ 8,792,861
--------------- --------------- ---------------- ---------------
Operating income before pre-opening costs $ 429,644 $ 142,081 $ 778,738 $ 444,973
Pre-opening costs $ 222,887 $ 26,000 $ 478,066 $ 59,000
--------------- --------------- ---------------- ---------------
Operating income $ 206,757 $ 116,081 $ 300,672 $ 385,973
Other income $ -773 $ -1,273 $ -2,715 $ -3,714
Interest income $ -12,592 $ -17,122 $ -43,945 $ -55,733
Interest expense $ 95,428 $ 83,395 $ 271,709 $ 243,816
--------------- --------------- ---------------- ---------------
Income before minority interest $ 124,694 $ 51,081 $ 75,623 $ 201,604
Minority interest in net loss of subsidiary $ 6,568 $ 0 $ 60,187 $ 0
--------------- --------------- ---------------- ---------------
Net Income $ 131,262 $ 51,081 $ 135,810 $ 201,604
=============== =============== ================ ===============
Income per share-basic $ 0 $ 0 $ 0 $ 0
=============== =============== ================ ==============
Income per share-diluted $ 0 $ 0 $ 0 $ 0
=============== =============== ================ ===============
Weighted average number of
common shares outstanding-basic $ 7,035,170 $ $7,024,170 $ 7,050,078 $ 7,023,928
=============== =============== ================ ===============
Weighted average number of
dilutive common shares outstanding $ 7,035,170 $ $7,024,170 $ 7,050,078 $ 7,196,468
=============== =============== ================ ==============
</TABLE>
See accompanying notes
-4-
<PAGE>
BOSTON RESTAURANT ASSOCIATES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Thirty-nine Weeks Ended
January 23 January 24
2000 1999
<S> <C> <C>
Cash flows provided by operating activities $ 756,702 $ 522,259
----------------- -----------------
Cash flows from investing activities:
Capital expenditures $ (1,990,559) $ (449,121)
----------------- -----------------
Cash flows used for investing activities $ (1,990,559) $ (449,121)
----------------- -----------------
Cash flows from financing activities:
Repayments of long-term debt $ (185,198) $ (625,000)
Repayments of capital lease obligations $ (107,458) $ (54,606)
Repayments of stockholder loans $ (3,530) $ (4,442)
Proceeds from subordinated debentures $ 0 $ 0
Proceeds from long-term debt $ 845,000 $ 538,472
Minority interest investment in subsidiary $ 34,858 $ 0
----------------- -----------------
Cash flows provided by (used for) financing activities $ 583,672 $ (145,576)
----------------- -----------------
Increase (decrease) in cash and cash equivalents $ (650,185) $ (72,438)
Cash and cash equivalents at beginning of period $ 1,863,299 $ 1,788,361
----------------- -----------------
Cash and cash equivalents at end of period $ 1,213,114 $ 1,715,923
================= =================
</TABLE>
See accompanying notes.
-5-
<PAGE>
BOSTON RESTAURANT ASSOCIATES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 23, 2000
(unaudited)
NATURE OF BUSINESS AND BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting only of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the thirteen-week period and thirty-nine week period ended January
23, 2000 are not necessarily indicative of the results that may be expected for
the year ending April 30, 2000. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-KSB for the year ended April 25, 1999. The
balance sheet at April 25, 1999 has been derived from the audited financial
statements at that date.
The accompanying statements of operations and cash flows for the fiscal 2000
period reflect the consolidated operations and cash flows of one casual dining
Italian restaurant and ten Pizzeria Regina restaurants for the entire period and
one additional casual dining Italian restaurant and three additional Pizzeria
Regina restaurants for part of the period. The accompanying statements of
operations and cash flows for the fiscal 1999 period reflect the consolidated
operations and cash flows of one casual dining Italian restaurant and nine
Pizzeria Regina restaurants for the entire period.
6
<PAGE>
NET INCOME PER SHARE
The Company follows Statement of Financial Accounting Standards No. 128,
"Earnings per Share." The following is a reconciliation of the denominator
(number of shares) used in the computation of earnings per share. The numerator
(net income) is the same for the basic and diluted computations.
Thirteen weeks ended Thirty-nine weeks ended
-------------------- -----------------------
January 23 January 24 January 23 January 24
2000 1999 2000 1999
---- ---- ---- ----
Basic 7,035,170 7,024,170 7,050,078 7,023,928
Shares
Effect of
Dilutive
Securities:
Options - - - 172,540
-------
Diluted
Shares 7,035,170 7,024,170 7,050,078 7,196,468
========= ========= ========= =========
The following table summarizes securities that were outstanding as of January
23, 2000 and January 24, 1999, but not included in the calculation of net income
per share because such securities are anti-dilutive:
Thirteen weeks ended Thirty-nine weeks ended
-------------------- -----------------------
January 23 January 24 January 23 January 24
2000 1999 2000 1999
---- ---- ---- ----
Options 1,217,446 1,078,746 1,217,446 228,346
Warrants 550,000 2,843,000 550,000 2,843,000
Convertible
Debentures 1,200,000 1,200,000 1,200,000 1,200,000
7
<PAGE>
ITEM 2. Management's Discussion and Analysis or Plan of Operation
----------------------------------------------------------
Results of Operations
- ---------------------
Overview
- --------
Operating income before pre-opening expenses for the thirteen week period was
$430,000 compared to $142,000 in the prior year's period. Pre-opening costs were
$223,000 in the current period, compared to $26,000 in the prior year's period,
resulting in operating income of $207,000 in the current period compared to
$116,000 in the prior year's period. Net income was $131,000 for the third
quarter of the current year compared to $51,000 for the same period in the prior
year. The increase in pre-opening costs is primarily attributable to the
increased number of restaurant openings.
Since the prior year's period, the Company has opened six new restaurants:
. three Pizzeria Regina food court kiosks at the following locations:
Independence Mall, Kingston, Massachusetts (opened June 21, 1999)
Holyoke Mall, Holyoke, Massachusetts (opened September 14, 1999)
Providence Place Mall, Providence, Rhode Island (opened October 27,
1999)
. one Polcari's North End Restaurant in Salem, New Hampshire (opened
January 19, 2000)
. two franchise Pizzeria Regina restaurants at the following locations:
Louisville, Kentucky (opened May 1999)
Las Vegas, Nevada (opened November 1999)
Most of the changes in absolute dollar amounts of both revenues and expenses,
and components of each, between the most recent thirteen week period and the
corresponding period of the prior year, and between the most recent thirty-nine
week period and the corresponding thirty-nine week period last year described
below are principally the result of the increased level of activities as a
result of these additional restaurants.
Thirteen Weeks Ended January 23, 2000 as Compared to Thirteen Weeks ended
- -------------------------------------------------------------------------
January 24, 1999
- ----------------
Restaurant Sales. Restaurant sales in the current period were $4,233,000,
- ----------------
compared to $3,175,000 in the prior year's period. The increase in restaurant
sales was partially attributable to the opening of the three new Pizzeria Regina
food court kiosks, and the one new Polcari's North End restaurant. Comparable
sales for the restaurants open throughout both the fiscal 2000 and 1999 periods
increased by approximately 3.1%.
Net Sales at the Company's Pizzeria Regina restaurants increased to $3,343,000
in the current period from $2,414,000 in the prior year's period. The increase
in net sales was principally due to the additional sales from the three new
Pizzeria Regina food court kiosks and secondarily to an increase in aggregate
same store sales for existing Pizzeria Regina restaurants.
Net sales at the Company's full service casual dining restaurants, Polcari's
North End, increased to $869,000 in the current period from $759,000 in the
prior year's period. This increase was primarily attributable to the additional
sales from the new Salem, New Hampshire Polcari's North End restaurant
8
<PAGE>
and increased customer traffic at the Saugus, Massachusetts Polcari's North End
restaurant.
The Company's franchise Pizzeria Regina restaurants account for a portion of the
Company's commissary sales. Sales at the Company's commissary were $21,000 in
the current period, compared to $2,000 in the prior year's period. The increase
in commissary sales was primarily attributable to the Company's first two
franchise Pizzeria Regina restaurants.
Royalties. During the current year period, the Company recognized $12,000 in
- ----------
royalties from its first two franchise Pizzeria Regina restaurants. The Company
also recognized $20,000 in franchise fee revenue from the Las Vegas, Nevada
franchise in the current period.
Costs and Expenses
- ------------------
Cost of Food, Beverages and Liquor. Cost of food, beverages and liquor as a
- ----------------------------------
percentage of restaurant sales was 20% in the current period, as compared to 21%
in the prior year's period.
The cost of food, beverages and liquor as a percentage of net sales at the
Pizzeria Regina restaurants was 18% and 19% in the fiscal 2000 and 1999 periods,
respectively. The cost of food, beverage and liquor as a percentage of sales
decreased at the Pizzeria Regina restaurants, principally due to lower cheese
costs.
The cost of food, beverages and liquor as a percentage of net sales at the
Company's full service casual dining restaurants was 29% in the current period
and 30% in the prior year's period. The decrease in cost as a percentage of
restaurant sales was primarily due to improved cost controls.
Other Operating Expenses
- ------------------------
Payroll Expenses. Payroll expenses were $1,177,000 (28% of sales) in the
- ----------------
current period, compared to $875,000 (28% of sales) in the prior year's period.
Payroll expenses at the Pizzeria Regina restaurants increased in absolute
dollars to $856,000 (26% of sales) in the current period from $606,000 (28% of
sales) in the prior year's period. The dollar increase in payroll expenses at
the Pizzeria Regina restaurants was primarily attributable to the opening of the
three new Pizzeria Regina food court kiosks.
Payroll expenses at the Company's full service casual dining restaurants
increased to $257,000 (30% of sales) in the current period from $221,000 (29% of
sales) in the prior year's period. The increase was primarily attributable to
the opening of the new Salem, New Hampshire Polcari's North End restaurant.
Payroll expenses at the Company's commissary were $64,000 for the current period
as compared to $48,000 in the prior year's period.
Other Operating Expenses, Exclusive of Payroll. Other operating expenses
- ----------------------------------------------
exclusive of payroll in the current period were $1,190,000 (28% of sales),
compared to $897,000 (28% of sales) in the prior year's period. The increase was
primarily attributable to the opening of the three new Pizzeria Regina food
court kiosks and the one new Polcari's North End restaurant.
9
<PAGE>
Other operating expenses from the Pizzeria Regina restaurants increased to
$942,000 (28% of sales) in the current period from $679,000 (28% of sales) in
the prior year's period. This increase is primarily attributable to the addition
of three new Pizzeria Regina food court kiosks.
Other operating expenses at the Company's full service casual dining restaurants
increased to $225,000 (26% of sales) in the current period from $204,000 (27% of
sales) in the prior year's period with the increase primarily attributable to
the addition of a new Polcari's North End restaurant. Other operating expenses
also include commissary expenses, which increased to $18,000 in the current
period, as compared to $14,000 in the prior year's period. In addition, the
Company realized franchising costs of $5,000 in the current period.
General and Administrative Expenses. General and administrative expenses were
- -----------------------------------
$422,000 (10% of sales) in the current period, as compared to $445,000 (14 % of
sales) in the prior year's period. The decrease in general and administrative
expenses as a percentage of sales was primarily due to the additional sales
generated by the three new Pizzeria Regina food court kiosks and the one new
Polcari's North End restaurant.
Depreciation and Amortization Expenses. Depreciation and amortization expense
- --------------------------------------
was $205,000 (5% of sales) in the current period, compared to $138,000 (4% of
sales) in the prior year's period. The increase in depreciation and
amortization expense was primarily attributable to the opening of the three new
Pizzeria Regina food court kiosks and the one new Polcari's North End
restaurant.
Pre-Opening Costs.
- -----------------
Pre-opening costs were $223,000 in the current period, compared to $26,000 in
the prior year's period. Pre-opening costs consisted primarily of costs
associated with the new Polcari's North End restaurant in Salem, New Hampshire
and the new food court kiosk at the Providence Place Mall in Providence, Rhode
Island.
Interest Expense and Interest Income. Interest expense increased to $95,000 in
- ------------------------------------
the current period from $83,000 in the prior year's period. The increase in
interest expense was primarily due to additional borrowings under the Company's
credit facility and to additional equipment leases associated with the three new
Pizzeria Regina food court kiosks.
Interest income decreased to $13,000 in the current period from $17,000 in the
prior year's period, primarily due to a decrease in cash reserves.
Thirty-nine Weeks Ended January 23, 2000 as Compared to Thirty-nine Weeks ended
- -------------------------------------------------------------------------------
January 24, 1999
- ----------------
Restaurant Sales. Restaurant sales in the fiscal 2000 period were $10,960,000,
- ----------------
compared to $9,238,000 in the fiscal 1999 period. The increase in restaurant
sales was attributable to the opening of the three new Pizzeria Regina food
court kiosks and the one new Polcari's North End restaurant. Comparable sales
for the restaurants open throughout both the fiscal 2000 and 1999 periods
increased approximately 3.5%.
10
<PAGE>
Net sales at the Company's Pizzeria Regina restaurants increased to $8,446,000
in the fiscal 2000 period from $7,040,000 in the fiscal 1999 period. The
increase in net sales was principally due to the additional sales from the three
new Pizzeria Regina food court kiosks and an increase in aggregate same store
sales for existing Pizzeria Regina restaurants.
Net sales at the Company's full service casual dining restaurants, Polcari's
North End, increased to $2,482,000 in the fiscal 2000 period from $2,188,000 in
the fiscal 1999 period. This increase was primarily attributable to the
additional sales from the Salem, New Hampshire Polcari's North End restaurant
and secondarily to increased customer traffic at the Saugus, Massachusetts
Polcari's North End restaurant.
Sales at the Company's commissary were $31,000 in the fiscal 2000 period,
compared to $10,000 in the fiscal 1999 period. The increase in commissary sales
was primarily attributable to the two new franchise Pizzeria Regina restaurants.
Royalties. During the fiscal 2000 period, the Company recognized $16,000 in
- ---------
royalties from its first two franchise Pizzeria Regina restaurants. The Company
also recognized $20,000 in franchise fee revenue from the Las Vegas, Nevada
franchise during the fiscal 2000 period.
Cost and Expenses
- -----------------
Cost of Food, Beverages and Liquor. Cost of food, beverages and liquor as a
- -----------------------------------
percentage of net sales was 20% in the fiscal 2000 period, as compared to 21% in
the fiscal 1999 period.
The cost of food, beverages and liquor as a percentage of restaurant sales at
the Pizzeria Regina restaurants was 17% in the fiscal 2000 period and 18% in the
fiscal 1999 period. The cost of food, beverage, and liquor as a percentage of
sales decreased at the Pizzeria Regina restaurants, principally due to lower
cheese costs.
The cost of food, beverages and liquor as a percentage of restaurant sales at
the Company's full service casual dining restaurants was 30% in the fiscal 2000
period and 31% in the fiscal 1999 period. The decrease in cost as a percentage
of restaurant sales was primarily due to improved cost controls.
Other Operating Expenses
- ------------------------
Payroll Expenses. Payroll expenses were $3,075,000 (28% of sales) in the fiscal
- ----------------
2000 period compared to $2,608,000 (28% of sales) in the fiscal 1999 period.
Payroll expenses at the Pizzeria Regina restaurants increased to $2,188,000 (26%
of sales) in the fiscal 2000 period from $1,810,000 (26% of sales) in the fiscal
1999 period. The increase in payroll expenses at the Pizzeria Regina restaurants
was primarily attributable to the opening of the three new Pizzeria Regina food
court kiosks.
Payroll expenses at the Company's full service casual dining restaurant
increased to $719,000 (29% of sales) in the fiscal 2000 period from $651,000
(30% of sales) in the fiscal 1999 period, with the decline as a percentage of
sales due to increased restaurant revenue. Payroll expenses at the Company's
11
<PAGE>
commissary were $168,000 for the fiscal 2000 period as compared to $147,000 in
the fiscal 1999 period.
Other Operating Expenses, Exclusive of Payroll Other operating expenses
- ----------------------------------------------
exclusive of payroll in the fiscal 2000 period were $3,144,000 (29% of sales),
compared to $2,649,000 (29% of sales) in the fiscal 1999 period. The increase in
other operating expenses in the fiscal 2000 period was primarily attributable to
the opening of the three new Pizzeria Regina food court kiosks and the one new
Polcari's North End restaurant.
Other operating expenses from the Pizzeria restaurants increased to $2,443,000
(29% of sales) in the fiscal 2000 period from $2,032,000 (29% of sales) in the
fiscal 1999 period. The increase is primarily attributable to the addition of
three new Pizzeria Regina food court kiosks.
Other operating expenses at the Company's full service casual dining restaurants
increased to $647,000 (26% of sales) in the fiscal 2000 period from $577,000
(26% of sales) in the fiscal 1999 period, with the increase primarily attributed
to the addition of a new Polcari's North End restaurant. Other operating
expenses also include commissary expenses, which increased to $45,000 in the
fiscal 2000 period, as compared to $40,000 in the fiscal 1999 period. In
addition, the Company realized franchising costs of $9,000 in the fiscal 2000
period.
General and Administrative Expenses. General and administrative expenses were
- -----------------------------------
$1,248,000 (11% of sales) in the fiscal 2000 period, as compared to $1,186,000
(13% of sales) in the fiscal 1999 period. The decrease in general and
administrative expenses as a percentage of sales is due to the additional sales
generated by the three new Pizzeria Regina food court kiosks and the one new
Polcari's North End restaurant.
Depreciation and Amortization Expenses. Depreciation and amortization expense
- --------------------------------------
was $527,000 (5% of sales) in the fiscal 2000 period, compared to $416,000 (5%
of sales) in the fiscal 1999 period. The increase in depreciation and
amortization expense was primarily attributable to the opening of the three new
Pizzeria Regina food court kiosks and the one new Polcari's North End
restaurant.
Pre-Opening Costs.
- -----------------
Pre-opening costs were $478,000 in the fiscal 2000 period, compared to $59,000
in the fiscal 1999 period. Pre-opening costs consisted primarily of costs
associated with the three new food court kiosks and the one new Polcari's North
End restaurant. Pre-opening costs also included costs associated with the two
new franchise Pizzeria Regina restaurants.
Interest Expense and Interest Income. Interest expense increased to $272,000 in
- -------------------------------------
the fiscal 2000 period as compared to interest expense in the fiscal 1999 period
of $244,000. This increase in interest expense was primarily due to additional
borrowings under the Company's credit facility and to additional equipment
leases associated with the three new Pizzeria Regina food court kiosks.
Interest income decreased to $44,000 in the fiscal 2000 period from $56,000 in
the fiscal 1999 period, primarily due to a decrease in cash reserves.
12
<PAGE>
Liquidity and Capital Resources.
- --------------------------------
At January 23, 2000, the Company had a negative net working capital of
approximately $31,000 and cash and cash equivalents of approximately $1,213,000.
During the thirty-nine weeks ended January 23, 2000, the Company had a decrease
in cash and cash equivalents of $650,000, reflecting net cash provided by
operating activities of $757,000, net cash used for investing activities of
$1,991,000 and net cash provided by financing activities of $584,000.
Net cash provided by operating activities included an increase in accounts
payable of $147,000, an increase in deferred rent of $23,000, an increase in
accrued expenses of $64,000 and a decrease in prepaid expenses of $18,000,
partially offset by an increase in inventories of $60,000, and an increase in
accounts receivable of $30,000. Net cash used for investing activities included
costs associated with the opening of the three new Pizzeria Regina food court
kiosks and the one new Polcari's North End restaurant. Net cash provided by
financing activities of $584,000 consisted of net repayments of long term debt
of $185,000 and lease obligations and stockholder loans in the aggregate amount
of $111,000, offset by the proceeds of $845,000 from the BankBoston credit line
and Italian Ventures' minority interest contributions to Regina Ventures of
$35,000.
At January 23, 2000, the Company had current liabilities of $1,614,000,
including $384,000 of accounts payables, $715,000 of accrued liabilities, and
current maturities of long term obligations in the amount of $515,000. At
January 23, 2000, the Company had long-term obligations, less current
maturities, in the amount of $3,031,000, including $823,000 due under its credit
facility with BankBoston, $113,000 of loans payable to a stockholder, $466,000
due under its capital lease obligations, $1,500,000 of convertible subordinated
debentures, and $129,000 of deferred rent. As of January 23, 2000, the Company
had accessed its credit facility with BankBoston in the amount of $1,145,000.
The Company believes that its existing resources, cash flow from operations and
borrowing under its credit facility will be sufficient to allow it to meet its
obligations over the next twelve months.
"Safe Harbor" Statement, Under the Private Securities Litigation Reform Act of
- ------------------------------------------------------------------------------
1995
- ----
Forward-looking statements in this report, including without limitation
statements relating to the adequacy of the Company's resources, and the timing
of the Company's expansion, are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Investors are cautioned
that such forward-looking statements involve risks and uncertainties, including
without limitation: potential quarterly fluctuations in the Company's operating
results; seasonality of sales; competition; risks associated with expansion; the
Company's reliance on key employees; risks generally associated with the
restaurant industry; risks associated with geographic concentration of the
Company's restaurants; risks associated with serving alcoholic beverages; and
other risks and uncertainties indicated from time to time in the Company's
filings with the Securities and Exchange Commission.
13
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. Legal Proceedings.
------------------
No material litigation.
ITEM 2. Changes in Securities.
----------------------
None.
ITEM 3. Defaults Upon Senior Securities.
--------------------------------
None.
ITEM 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
None.
ITEM 5. Other Information.
------------------
None.
ITEM 6. Exhibits and Reports On Form 8-K.
---------------------------------
(a) Exhibits.
---------
(27) Financial Data Schedule
14
<PAGE>
(b) Reports On Form 8-K.
--------------------
1. Form 8-K dated 24 November 1999 reporting Nasdaq Listing Qualification
Panel delisting of Boston Restaurant Associates, Inc's common stock because
of a failure to comply with the $1.00 per share minimum bid price
requirement.
SIGNATURES
----------
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
BOSTON RESTAURANT ASSOCIATES, INC.
Date: March 6, 2000 By: /s/ George R. Chapdelaine
----------------------------------
George R. Chapdelaine, President and
Chief Executive Officer
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
"THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
CONSOLIDATED BALANCE SHEETS AS OF JANUARY 23, 2000 (UNAUDITED) AND APRIL 25,
1999 AND CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THIRTEEN WEEKS
ENDED JANUARY 23, 2000 AND JANUARY 24, 1999 (UNAUDITED) AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS."
</LEGEND>
<CIK> 0000926295
<NAME> BOSTON RESTAURANT ASSOCIATES, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-2000
<PERIOD-START> OCT-25-1999
<PERIOD-END> JAN-23-2000
<EXCHANGE-RATE> 1.00
<CASH> 1,213,114
<SECURITIES> 0
<RECEIVABLES> 61,731
<ALLOWANCES> 0
<INVENTORY> 274,714
<CURRENT-ASSETS> 1,582,494
<PP&E> 8,292,275
<DEPRECIATION> 2,994,482
<TOTAL-ASSETS> 8,100,020
<CURRENT-LIABILITIES> 1,613,941
<BONDS> 0
0
0
<COMMON> 70,352
<OTHER-SE> 3,381,406
<TOTAL-LIABILITY-AND-EQUITY> 8,100,020
<SALES> 4,232,952
<TOTAL-REVENUES> 4,265,075
<CGS> 841,773
<TOTAL-COSTS> 4,058,318
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 95,428
<INCOME-PRETAX> 131,262
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 131,262
<EPS-BASIC> .02
<EPS-DILUTED> .02
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
"THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
CONSOLIDATED BALANCE SHEETS AS OF JANUARY 24, 1999 (UNAUDITED) AND APRIL 26,
1998 AND CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THIRTEEN WEEKS
ENDED JANUARY 24, 1999 AND JANUARY 25, 1998 (UNAUDITED) AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS."
</LEGEND>
<CIK> 0000926295
<NAME> BOSTON RESTAURANT ASSOCIATES, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-25-1999
<PERIOD-START> OCT-26-1998
<PERIOD-END> JAN-24-1999
<EXCHANGE-RATE> 1.00
<CASH> 1,715,923
<SECURITIES> 0
<RECEIVABLES> 39,070
<ALLOWANCES> 0
<INVENTORY> 231,672
<CURRENT-ASSETS> 2,082,423
<PP&E> 5,844,953
<DEPRECIATION> 2,463,857
<TOTAL-ASSETS> 6,785,939
<CURRENT-LIABILITIES> 910,327
<BONDS> 0
0
0
<COMMON> 70,242
<OTHER-SE> 3,368,125
<TOTAL-LIABILITY-AND-EQUITY> 6,785,939
<SALES> 3,175,151
<TOTAL-REVENUES> 3,176,424
<CGS> 677,865
<TOTAL-COSTS> 3,059,070
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 83,395
<INCOME-PRETAX> 51,081
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 51,081
<EPS-BASIC> .01
<EPS-DILUTED> .01
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
"THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
CONSOLIDATED BALANCE SHEETS AS OF JANUARY 23, 2000 (UNAUDITED) AND APRIL 25,
1999 AND CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THIRTY-NINE
WEEKS ENDED JANUARY 23, 2000 AND JANUARY 24, 1999 (UNAUDITED) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS."
</LEGEND>
<CIK> 0000926295
<NAME> BOSTON RESTAURANT ASSOCIATES, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-30-2000
<PERIOD-START> APR-26-1999
<PERIOD-END> JAN-23-2000
<EXCHANGE-RATE> 1.00
<CASH> 1,213,114
<SECURITIES> 0
<RECEIVABLES> 61,731
<ALLOWANCES> 0
<INVENTORY> 274,714
<CURRENT-ASSETS> 1,582,494
<PP&E> 8,292,275
<DEPRECIATION> 2,994,482
<TOTAL-ASSETS> 8,100,020
<CURRENT-LIABILITIES> 1,613,941
<BONDS> 0
0
0
<COMMON> 70,352
<OTHER-SE> 3,381,406
<TOTAL-LIABILITY-AND-EQUITY> 8,100,020
<SALES> 10,959,599
<TOTAL-REVENUES> 10,995,246
<CGS> 2,222,199
<TOTAL-COSTS> 10,694,574
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 271,709
<INCOME-PRETAX> 135,810
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 135,810
<EPS-BASIC> .02
<EPS-DILUTED> .02
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
"THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
CONSOLIDATED BALANCE SHEETS AS OF JANUARY 24, 1999 (UNAUDITED) AND APRIL 26,
1998 AND CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THIRTY-NINE
WEEKS ENDED JANUARY 24, 1999 AND JANUARY 25, 1998 (UNAUDITED) AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS."
</LEGEND>
<CIK> 0000926295
<NAME> BOSTON RESTAURANT ASSOCIATES, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-25-1999
<PERIOD-START> APR-27-1998
<PERIOD-END> JAN-24-1998
<EXCHANGE-RATE> 1.00
<CASH> 1,715,923
<SECURITIES> 0
<RECEIVABLES> 39,070
<ALLOWANCES> 0
<INVENTORY> 231,672
<CURRENT-ASSETS> 2,082,423
<PP&E> 5,844,953
<DEPRECIATION> 2,463,857
<TOTAL-ASSETS> 6,785,939
<CURRENT-LIABILITIES> 910,327
<BONDS> 0
0
0
<COMMON> 70,242
<OTHER-SE> 3,368,125
<TOTAL-LIABILITY-AND-EQUITY> 6,785,939
<SALES> 9,237,834
<TOTAL-REVENUES> 9,241,548
<CGS> 1,934,217
<TOTAL-COSTS> 8,851,861
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 243,816
<INCOME-PRETAX> 201,604
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 201,604
<EPS-BASIC> .03
<EPS-DILUTED> .03
</TABLE>
